Fact Check: "The Assura plc board has badly handled the PHP/KKR bids"
What We Know
The bidding war for Assura plc involved two main contenders: KKR, a private equity firm, and Primary Health Properties (PHP). KKR initially offered £1.61 billion for Assura, which was later outbid by PHP with a higher offer of £1.68 billion. Ultimately, PHP raised its bid to £1.79 billion, which was accepted by Assura's board, indicating a preference for PHP's offer over KKR's cash proposal (source-1, source-2).
Assura's board deemed PHP's proposal less risky, citing concerns about leverage and execution complexity associated with merging two Real Estate Investment Trusts (REITs) (source-4). The final offer from KKR was structured to provide cash certainty, which was a significant factor in the board's decision-making process (source-4).
Analysis
The claim that the Assura plc board "badly handled" the bids can be evaluated from multiple angles. On one hand, the board's decision to favor PHP's offer over KKR's cash bid could be seen as prudent, as it reflects a strategic choice to minimize risk associated with the merger of two REITs. The board assessed that PHP's offer, while higher, came with complexities that could jeopardize the execution of the deal (source-4).
However, some analysts and shareholders expressed concerns that the board may have undervalued the cash certainty offered by KKR, which could have provided immediate financial benefits without the risks associated with a merger (source-6). The board's decision could be interpreted as a failure to maximize shareholder value, especially given the significant premium offered by KKR compared to Assura's pre-offer price (source-1).
The sources used in this analysis are credible, including financial news outlets like Reuters and Bloomberg, which provide well-researched insights into corporate transactions. However, there is potential bias in the interpretation of the board's actions, as some reports may emphasize shareholder dissatisfaction more than the strategic rationale behind the board's decision.
Conclusion
The claim that "the Assura plc board has badly handled the PHP/KKR bids" is Partially True. While the board's decision to accept PHP's higher bid can be justified by the desire to mitigate risk and complexity, it also raises questions about whether they adequately considered the immediate financial benefits of KKR's cash offer. The mixed reactions from analysts and shareholders suggest that the board's handling of the situation was not universally viewed as effective, leading to a nuanced verdict.
Sources
- Assura takeover battle heats up as UK peer PHP outbids US suitors - Reuters
- PHP Raises Assura Bid to £1.79 Billion in Latest KKR Fight - Bloomberg
- KKR Secures £1.7bn Healthcare Infrastructure Crown Jewel With Assura - CorpDev
- PHP wins out in battle for Assura with £1.79bn bid - QuotedData
